Ideas borrowed from the startup world – crowdfunding, incubators, accelerators and online marketplaces – could help close the US$2.5 trillion shortfall in funding for the United Nations Sustainable Development Goals.
Our research with the Department of Foreign Affairs and Trade shows these methods can increase aid by attracting funding from private investors and diaspora communities.
But several barriers need to be overcome first. Education is the biggest challenge – all stakeholders, both investors and entrepreneurs, need to understand the potential of these methods as well as how (and when) to use them. We need to ensure programs are available in local languages and in rural areas. Lastly, we should not overburden entrepreneurs and grantees with complicated impact measurements.
Crowdfunding platforms, where entrepreneurs post a project and members of the public contribute small amounts, can be a very successful method not only to deliver funds, but to test how much interest there is in a product or project. The micro-lending platform Kivais an example of this in action. Kiva claims to have provided over US$1 billion in loans to 2.5 million people since launching in 2005. Its funded projects range from small businesses to village development